Q4 2024 CNX Resources Corp Earnings Call
After today's brief presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.
Please note this event is being recorded.
Speaker Change: Now I'd like to turn the conference over to Tyler Lewis Vice President of Investor Relations. Please go ahead.
Thank you and good morning, everybody.
Speaker Change: Welcome to <unk> fourth quarter Q&A conference call today, we will be answering questions related to our fourth quarter results.
Speaker Change: This morning, we pass it through our Investor Relations website, an updated slide presentation and detailed fourth quarter earnings release data such as quarterly E&P data financial statements and non-GAAP reconciliations, which can be found in a document titled for Q2 thousand 24 earnings results and supplemental information.
Speaker Change: <unk> resources are.
Speaker Change: Also we posted to our Investor Relations website, our prepared remarks for the quarter, which we hope everyone had a chance to read before they call as the call today will be used exclusively for Q&A.
Speaker Change: With me today for Q&A are Nick <unk>, our president and CEO, Alan Shepard, our Chief Financial Officer that need Bell, our Chief operating officer, and Ravi <unk> President of our New technologies group.
Speaker Change: Please note the company's remarks made during this call include answers to questions, including forward looking statements, which are subject to various risks and uncertainties. These statements are not guarantees of future performance and our actual results may differ materially as a result of many factors the discussion of risks and uncertainties related to this factors and <unk>.
<unk> is contained in its filings with the Securities and Exchange Commission and in the release issued today.
Speaker Change: With that thank you for joining us this morning, and operator can you. Please open the call up for Q&A at this time.
Speaker Change: We will now begin the question and answer session again to ask a question you May Press Star then one on your telephone keypad.
Speaker Change: If you were using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
Speaker Change: Our first question today comes from Gabe Daoud with TD Cowen. Please go ahead.
Gabe Daoud: Hey, thanks.
Gabe Daoud: Everyone was hoping to start first on.
Speaker Change: New technologies, and specifically 45 would you be able to walk us through your interpretation of guidance.
Speaker Change: Whether the existing partnership with <unk> will move forward I guess I had thought that <unk>.
Speaker Change: Even with flaring as the counterfactual the carbon intensity of PNM would still put you in a position to recognize maximum credit value. So we love I guess a bit more understanding on that.
Ravi: Yeah. Thanks for the question Ravi.
Speaker Change: I think you had.
Ravi: Quite a few layers in that collection some b.
Ravi: Client address them one after the other so.
Ravi: First of all the root provided important pattern recognition, Florida captured Coalbed methane.
Ravi: The low carbon intensity feedstocks for hydrogen production it would be pretty excited about that and kind of validate pnm's potential for <unk> to decarbonize. Our range of you know hard to bake sectors.
Ravi: So with this conclusion.
Ravi: If successfully validated.
Ravi: Premium nature of our coal mine methane.
Ravi: Previously the manufacturing.
Ravi: And then in power and now we have validation within the hydrogen production sector.
Ravi: But.
Ravi: While we're excited about the recognition of DMM in 45 V and the way the FERC productive.
Ravi: Rules came out that was pretty good but.
Ravi: There were quite a few restrictions that were introduced.
Ravi: The rules, which we believe are inconsistent with the scientific assessment of <unk> that was done by the National Labs, and what the what the intent of the IRA was.
Ravi: So.
Ravi: We're looking forward to the administration will have an opportunity to kind of improve the rules.
Ravi: To ensure there is clarity to make necessary investment decisions in the future.
Ravi: Hailed as hydrogen economy.
Ravi: And like our participation and moving some of these project forward, it's going to be contingent on on clarity on these rules going forward.
Ravi: Okay got it got it so any more clarity before moving forward with anything okay. Okay.
Ravi: Thanks for that and then I guess as a follow up I'll switch gears to the E&P side could you maybe just talk a little bit about the second half of 'twenty five with the first half.
Ravi: Being being or.
Ravi: Capital being heavily weighted to the first half obviously, we'd expect some declines in the second half into 2026, so any additional commentary on maybe timing of re accelerating activity or what you would need to see to spend more capital and 25 any additional clarity there would be helpful. Thanks, everyone.
Ravi: Yeah. So this is Alan.
Ravi: The way, we think about our repositioning.
Ravi: The activities that basically the whole production flat coming through 'twenty for the activities that is primarily weighted upfront into Q1.
Ravi: Need to wait and see kind of where the industry production levels, all coming out of winter.
Finalized fewer stores were projected sorts is going to be in.
Ravi: And then we'll make an assessment, but we didn't want to create that flexibility if prices stay high or go higher you could see us accelerate some activity and bring up some more volumes, but it's too early to tell at this point.
Ravi: Got it thanks guys.
Speaker Change: The next question is from Zack <unk> with J P. Morgan. Please go ahead.
Zack: Thanks for taking my question.
Zack: I wanted to follow up on the 2025 budget it seems very efficient and it seems to be benefiting from some docks on the apex assets.
Zack: Could you just give us some color on what the run rate spending would be if you were going to hold this level of production flat going forward.
Speaker Change: Yeah. So I think we've talked about this at the beginning of last year. The goal kind of a run rate is sub 500, and there's two things driving that right.
Speaker Change: You're starting to see the efficiencies from the Utica CPA development combined with our or kind of low decline PDP base.
Speaker Change: So we're comfortable on the legacy assets that you could hold that below 500.
Speaker Change: Upcoming years with respect to apex.
Speaker Change: We had the tools that are going to come online here basically those wells were completed.
Speaker Change: Clothes, often introduced kind of flow those back and turn them in.
Speaker Change: Ultimately, what we do with that position.
We will see and that goes back to the earlier comment about production levels on that asset are going to be set by market pricing later in the year as part of our capital allocation process.
Speaker Change: Got it thanks for that color and I wanted to follow up on Dave's question.
Speaker Change: You spoke about 45 Z, but could you talk about other potential pathways to generate credits from the CRM business in the future just ruined it really trying to think about what could be next for this environmental attributes business.
Speaker Change: Yeah. So.
Speaker Change: Like we've been talking about this coal mine methane offer superior environmental and economic advantage.
Speaker Change: Energy source and MBS successfully validating its opinion pricing in manufacturing, but do you like you like you know in our powered.
Speaker Change: Power generation sector with <unk>.
Speaker Change: Qualification the Ats by program and now are in.
Speaker Change: With $2 45 for hydrogen production. So we're going to continue to target these different sectors, whether its power generation manufacturing data centers.
Speaker Change: And the validation that we get from <unk>.
Speaker Change: Recognition for this program is kind of open up a lot of other monetization opportunity. So we keep driving those efforts and we'll share more information as we have more updates to share on that front.
Thanks, a lot.
Speaker Change: The next question is from Leo Mariani with Ross. Please go ahead.
Leo Mariani: Hi, I just wanted to dive in a little bit more to some of the new tech numbers here. So it looks like fourth quarter of 'twenty four saw very robust free cash flow at $30 million. So as we're kind of looking ahead into 2025 seemingly.
Leo Mariani: Seemingly you guys are guiding to say that new tax free cash flow will be down a little bit. This year, maybe you could just provide a little color around that given the strength that we saw.
Leo Mariani: And for Q and then just additionally.
Leo Mariani: Have you seen any real contribution yet from the oilfield service business or the PNG LNG business and in 2020 for that free cash flow and expect those businesses to be additive here in 'twenty five.
Ravi: Yes, so it's Ravi again so.
Ravi: The fourth quarter numbers are kind of primarily primarily in Q3, you had a we had a lower volume do you have a lower cash flow number because some of the volumes got pushed into Q4.
Sectors, whether its power generation manufacturing Datacenters, all you know.
Ravi: So the Q4 numbers that kind of benefiting from monetization up more.
Ravi: Environmental attributes and in the Q4 volume itself.
And the validation that we get from a recognition that these programs kind of open up a lot of other monetization opportunity. So we will keep driving those efforts and we'll share more information as we have more updates to share on that front.
Ravi: In Q quarter itself, so the overall volume.
Ravi: And we were able to kind of bring some some volume that would have been monetizing in January kind of got into December.
Thanks, a lot.
Ravi: Which allowed the Q4 number to be high but on a on a run rate basis I think the volumes that we will be able to monetize into the ATM program is in that 17 to 18 Bcf.
Speaker Change: The next question is from Leo Mariani with Ross. Please go ahead.
Leo Mariani: Well I just wanted to dive in a little bit more to some of the new tax numbers here. So it looks like fourth quarter of 'twenty four saw very robust free cash flow at $30 million. So as we're kind of looking ahead.
Ravi: And the value recognition is kind of still staying in that let's say, 30% to $35 per megawatt hour range. So I think and thats going to be the primary driver for the free cash flow in that segment of it kind of comes out.
Speaker Change: 2025.
Ravi: That $75 million ish per year range, there maybe like some.
Speaker Change: Mainly you guys are guiding to say that new tax free cash flow will be down a little bit. This year, maybe you could just provide a little color around that given the strength that we saw.
Ravi: Absent flows because when some of those volumes get monetize but largely that's what the private Reits.
Speaker Change: With <unk> and then just additionally, you have you seen any real contribution yet from the oilfield service business or the <unk> LNG business and in 2020 for that free cash flow and expect those businesses to be additive here in 'twenty five.
Ravi: The auto <unk> business they are still in the early commercialization phase.
Ravi: Auto sectors.
Ravi: Well, it's the fully deployed on <unk> footprint in there.
Ravi: We're seeing the cost benefits and the safety benefits in operational efficiencies and emission reduction.
Speaker Change: Yeah, So it's Ravi again so.
Ravi: Objectives that we wanted to achieve but that's what we're seeing that on that front, but oh expansion beyond <unk> that footprint, we expect to see in 'twenty five and some of that materializes, we will share more information.
Speaker Change: The fourth quarter numbers are.
Speaker Change: Primarily if you've used primarily in Q3, we had a we had a lower volume you had a lower cash flow number because some of the volumes got pushed into Q4.
Speaker Change: So the Q4 numbers that kind of benefiting from a monetization up more.
Speaker Change: Okay. That's helpful.
Speaker Change: And then obviously I think in your comments you folks referred to hopefully the new administration here, which has come in might take a fresh look at the 45, the rule interpretation and maybe make some more favorable changes.
Speaker Change: Environmental attributes and into Q4 volume itself.
Speaker Change: In Q4 itself. So the overall volume is consistent and we were able to kind of bring some some volume that would have been monetizing in January kind of got into December.
Speaker Change: Overall, obviously had 45 Q legislation.
Speaker Change: Which allowed the Q4 number to be higher but on a on a run rate basis I think the volumes that we will be able to monetize them about Ats program isn't that 17 to 18 Bcf.
Speaker Change: Pending as well clearly we had the the red sweep.
Speaker Change: That happened with the elections here.
Speaker Change: And the value recognition is kind of still staying in the let's say 30 to $35 per megawatt hour range. So I think that's going to be the primary driver for the free cash flow in that segment of it kind of comes out on that.
Speaker Change: It's been I guess.
Speaker Change: A short period of time, just a couple of weeks since the Trump administration has taken over do you folks have any read on how the new administration would just kind of be viewing coal mine methane in terms of the abatement, there and how that can kind of translate into potential opportunities for you folks has there been any signal.
Speaker Change: That $75 million ish per year range, there maybe like some.
Speaker Change: Ebbs and flows because of when some of those volumes kept monetize but largely that's what the driver is.
Speaker Change: And the administration that they are more inclined to maybe be helpful. On this front.
Speaker Change: The the auto SAP and CMG business. They are still in an early commercialization phase I mean were auto sector as well.
Speaker Change: I mean, I would say it's too early at this point in time.
Speaker Change: I mean coalbed methane.
Speaker Change: Well, it's the fully deployed on C N access footprint in there.
Speaker Change: A lot of inherent environmental and economic.
Speaker Change: We're seeing the cost benefits and the safety benefits in operational efficiencies and emission reduction.
Speaker Change: Economic benefits. So I think we're going to continue to aggregate them make the case for it but it's a 45, you and other processes like that they're going to run their political due course.
Speaker Change: Objectives that we wanted to achieve but that's what we're seeing that on that front, but our expansion beyond <unk> that footprint, we expect to see in 'twenty five and some of that materialize as Glen will share more information.
Speaker Change: And we will stay connected in that with the right folks but.
Speaker Change: Uh huh.
Speaker Change: In the meantime, we're going to continue to pursue opportunities in these other markets and sectors.
Speaker Change: From a monetization pathways.
Speaker Change: Okay. That's helpful.
Speaker Change: Okay. That's helpful. And then just jumping over to some of your comments on production just real quick I just wanted to kind of make sure I sort of understood them. So really the goal here of a <unk>.
Speaker Change: And then obviously I think in your comments you folks referred to hopefully the new administration here, which has come in might take a fresh look at the 45 D rule interpretation and maybe make some more favorable changes.
Speaker Change: 25 production as to kind of keep your your base volumes flat, but it sounds like if I heard you right Youll expect to see some maybe modest declines on the apex volumes, maybe as we get into the second half of the year. I know you are bringing some deferred tails com online, which will happen for little to no capital made that perhaps the production in the near term, but then.
Speaker Change: Overall, obviously had 45 Q legislation.
Speaker Change: Pending as well clearly we had the the red sweep.
Speaker Change: That happened with the elections here.
Speaker Change: It's been I guess.
Speaker Change: A short period of time, just a couple of weeks since the Trump administration has taken over do you folks have any read on how the new administration would just kind of be viewing coal mine methane in terms of the abatement, there and how that can kind of translate into potential opportunities for you folks has there been any signal.
Speaker Change: Can you kind of see a modest decline in.
Speaker Change: In the second half just wanted to make sure I sort of.
Speaker Change: Is that right and it sounded like also if conditions, though are more favorable in the gas market and the rest of the winter is decent then there's a reasonable chance you might have a few more wells late this year with maybe the goal to kind of flatten that out as we head into the end of the year in 'twenty six.
Speaker Change: And the administration that they are more inclined to maybe be helpful. On this front.
Speaker Change: Yes, that's right.
Speaker Change: The guidance we provided.
Speaker Change: I mean, I would say it's too early at this point in time, Oh, I mean coal mine methane.
Speaker Change: Speaks to what you're talking about with the Optionality to.
Speaker Change: Increased volumes are accelerating volumes in the second half of the year, if the pricing and capital allocation methodologies suggests we should do that.
Speaker Change: A lot of inherent environmental and.
Speaker Change: Economic benefits. So I think we're going to continue to advocate and make the case for it but it's a 45, you and other processes like that they're going to run their political due course.
Speaker Change: Okay.
Speaker Change: Okay. Thank you for the clarification.
Donna's: The next question is from bird Donna's with Truest. Please go ahead.
Speaker Change: We'll stay connected in that with the right folks but.
Donna's: Hey, good morning, guys on the coal mine methane front I just want to make sure I understood. Your comments correctly, you're only looking for clarity on the the overly restrictive rules, but if those are cleared up the financial incentives are enough is that correct. And then is there any capital levels that would be associated if the rules were clarified positively that maybe capex.
Speaker Change: Uh huh.
Speaker Change: In the meantime, we're going to continue to pursue opportunities in these other markets and sectors.
Speaker Change: For monetization pathways.
Speaker Change: Okay. That's helpful. And then just jumping over to some of your comments on production just real quick I just wanted to kind of make sure I sort of understood them. So really the goal here of a <unk>.
Donna's: You have to spend.
Speaker Change: 25 production as to kind of keep your your base volumes flat, but it sounds like if I heard you right Youll expect to see some any modest declines on the apex volumes, maybe as we get into the second half of the year I know, you're bringing some deferred tails com online, which will happen for little to no capital maybe that props up production in the near term, but then.
Donna's: But I think it's going to it's a.
Donna's: The restricted nature of the rules and like there's some lack of clarity on.
Speaker Change: Oh, the booking claim methods in which I'll make facilities qualify there's there's a lot there to unpack I think it's going to take a little bit of time to figure out.
Speaker Change: Like how how long those things kind of shake out and once we have a better idea of.
Speaker Change: You kind of see a modest decline in the <unk>.
Speaker Change: Second half.
Speaker Change: All of those things I think that you can provide a better understanding of what the.
Speaker Change: Want to make sure I sort of.
Speaker Change: I heard that right and it sounded like also if conditions, though are more favorable in the gas market and the rest of the winter is decent then there's a reasonable chance you might have a few more wells late this year with maybe the goal to kind of flatten that out as we head into the end of the year in 'twenty six.
Speaker Change: Oh the plan forward would be in terms of capital investments in like it'll ramp those type of investments are made so.
Speaker Change: There's just.
Speaker Change: Too much lack of clarity at this point in time, and it's going to take a little bit.
Speaker Change: Trying to figure out how the rules get fixed and then how some of the more clarification.
Speaker Change: Yes, that's right.
Speaker Change: And D O E on some of the other applications kind of comes in so too early at this point in time to comment on that.
Speaker Change: The guidance, we provided kind.
Speaker Change: Kind of speaks to what you were talking about with the Optionality to do.
Speaker Change: Increased volumes are accelerating volumes in the second half of the year, if the pricing and capital allocation methodologies suggests we should do that.
Speaker Change: Okay.
Speaker Change: Just to make sure there is some level of if the rules were clarified positively you you would have some level of revenue, but then maybe you could increase that amount by spending some capital I guess theres room to accelerate.
Speaker Change: Okay. Okay. Thank you for the clarification.
Bird Daunus: The next question is from bird Daunus with Truest. Please go ahead.
Speaker Change: Activity through operation.
Bird Daunus: Hey, good morning, guys on the coal mine methane front I just want to make sure I understood. Your comments correctly, you're only looking for clarity on the the overly restrictive rules, but if those are cleared up the the financial incentives are enough is that correct. And then is there any capital levels that would be associated if the rules were clarified positively that maybe capex you'd have to do.
Speaker Change: So this is Matt just to be clear them back up.
Speaker Change: That's where we're at with coal mine methane and the climate benefits tied to it as a fuel stock blend.
Speaker Change: Glenn to different industries.
Speaker Change: Got manufacturing, whereas established a premium pricing level is that the hydrogen economy now with the recently issued 45 guidance and we've got the power generation sector with.
Bird Daunus: Great.
Bird Daunus: But I think it's going to.
Bird Daunus: The restricted nature of the rules and like there's some lack of clarity on.
Speaker Change: <unk> sort of programs like the Aps standards in Pennsylvania, we're continuing to work all of those different avenues to optimize that portfolio and some of that is going to involve things like 45% and 45 and some of that will include pursuing opportunities in things like the AI.
Bird Daunus: But look in claim methods in which are like facilities qualify. There's there's a lot there to unpack I think it's going to take a little bit of time to figure out you know.
Like how long those things kind of shake out and once we have a better idea of.
Bird Daunus: All of those things I think that you can provide a better understanding of what the.
Speaker Change: Power generation industry to feed it and recognizing the benefits in market transactions with regard to.
Bird Daunus: Oh the plan forward would be in terms of capital investments in like an oak ramp those capital investments are made so.
Speaker Change: Fugitive methane capture so with respect to these individual rules and programs as part of a bigger puzzle and it's too early to say, we'll have to wait and see where it lands.
Bird Daunus: There's just.
Bird Daunus: Too much lack of clarity at this point in time, and it's going to take a little bit of.
Bird Daunus: Trying to figure out how the rules get fixed and then how some of the more clarification.
That's perfect. Thank you and then just the other question would be on the buyback activity. It was just a little bit surprised you didn't step in in 'twenty.
Bird Daunus: And D O E on some of the other applications kind of comes in so too early at this point in time to comment on that.
Speaker Change: Q1 of 'twenty, five where there may be some blackout periods due to apex or maybe a view on the macro or is it at maybe a game of we should preserve the capital if we wanted to accelerate in the second half instead of using it on buybacks now or just any thoughts there. Thanks guys.
Bird Daunus: Okay.
Bird Daunus: Just to make sure. So there is some level of it. The rules were clarified positively you you would have some level of revenue, but then maybe you could increase that amount by spending some capital I guess, there's room to accelerate.
Speaker Change: Yeah, I think we've talked about before it doesn't.
Bird Daunus: Activity through operation.
Speaker Change: We don't talk about tactics on these calls I think we just refer back to them, we do run our continuous capital allocation process and obviously there is a blackout period.
So this isn't that just to be clear and back up a step.
Bird Daunus: Where we're at with coal mine that Dane and the climate benefits tied to it as a fuel stock blend to different industries, we've got manufacturing, whereas established a premium pricing level. We've got the hydrogen economy now with the recently issued 45 guidance and we've got the power generation sector.
Speaker Change: Part of that consideration.
Speaker Change: Understood. Thanks, guys.
Speaker Change: The next question is from Michael <unk> with Stephens. Please go ahead.
Michael: Thank you good morning, everybody wanted to ask on the apex acquisition, you talked about a 600 net acres there of undeveloped.
Bird Daunus: With.
Bird Daunus: Sort of programs like the Aps standards in Pennsylvania, we're continuing to work all of those different avenues to optimize that portfolio and some of that is going to involve things like 45, 2% and 45 and some of that will include pursuing opportunities in things like the the AI.
Speaker Change: <unk>.
Speaker Change: Just wondering with a deal that acquisition would be at 36000 acres was the Utica developed on.
Speaker Change: A large portion of that acreage or is it limited by geology looking for a little bit more color there.
Speaker Change: Yeah. Our view is that there is Volvo, where you've got across that footprint and there hasnt been any development on that particular asset just yet on the Utica.
Bird Daunus: Power generation industry to feed it and recognizing the benefits of market transactions with regard to.
Bird Daunus: Fugitive methane capture so with respect to these individual rules and programs as part of a bigger puzzle and it's too early to say, we'll have to wait and see where it lands.
Speaker Change: Those are good.
Speaker Change: Does that imply that there is upside to that 8600, I guess I'm just looking at how did you come to the 8600.
Speaker Change: That's perfect. Thank you and then just the other question would be on the buyback activity. It was just a little bit surprised you didn't step in in 'twenty in Q1 of 'twenty, five where there may be some blackout periods due to apex or maybe a view on the macro or is it at maybe a game of we should preserve the capital if we wanted to accelerate in the second half instead of using it on.
Speaker Change: Number.
Speaker Change: 600, and will be disclosed on the acquisition, you're saying on the near term.
Speaker Change: The control arm so yeah.
Speaker Change: Further controlled rights acquisition, that's what they had in terms of Oh, we've got under lease.
Speaker Change: Got you so they didn't have a right up to the whole 36, Okay got it.
Bird Daunus: Buybacks now are just any thought there thanks guys.
Speaker Change: 6000, sorry.
Speaker Change: Yeah, I think we've talked about before it doesn't.
Speaker Change:
Speaker Change: And of those eight wells that.
Speaker Change: We don't talk about tactics on these calls I think we'd just refer back to them, we do run our continuous capital allocation process and obviously there is a blackout period.
Speaker Change: Or going to be turned in line on.
Speaker Change: That acreage are all those marcellus or any of those beautiful.
Speaker Change: Part of that consideration.
Speaker Change: Those are all Marcellus.
Speaker Change: Okay, and just one more on the Utica, just as you're still thinking kind of three bcf per.
Speaker Change: Understood. Thanks, guys.
Speaker Change: The next question is from Michael <unk> with Stephens. Please go ahead.
Speaker Change: <unk> thousand foot of lateral and any update on what you're seeing with cost per lateral foot and those wells.
Michael: Thank you good morning, everybody wanted to ask on the apex acquisition, you talked about a 600 net acres there of undeveloped.
Speaker Change: Yeah, Mike that's correct.
Speaker Change: The range that we gave guidance last quarter like the BBC and all that they are holding production like we expect it to and they are they are in line 40 Bcf per thousand feet.
Speaker Change: Dicker.
I'm, just wondering with a deal that acquisition being 36000 acres was the Utica developed on.
Speaker Change: A large portion of that acreage or is it limited by geology looking for a little bit more color there.
Speaker Change: Okay.
Speaker Change: Anything on the cost.
Speaker Change: Yeah. Our view is that there's Volvo, where you've got across that footprint and there hasnt been any development on that particular asset just yet on the Utica.
Speaker Change: Cost side, you can say there.
Speaker Change: I would just say part of the capital efficiency number that youre seeing in the total capex.
Speaker Change: The living as well.
Speaker Change: So is there.
Speaker Change: The target numbers are considered I think there's a little bit of room to improve in order to continue to work on that but we're.
Speaker Change: Good.
Speaker Change: Does that imply that there's upside to that 8600, I guess I'm just looking at how did you come to the 8600.
Speaker Change: Very pleased with where we're at on the drilling and the capital efficiency side on those wells.
Speaker Change: Number.
Speaker Change: 600 will be disclosed on the acquisition, you're saying on the near term.
Speaker Change: Great I appreciate it guys.
Noah Hung: The next question is from Noah hung this with Bank of America. Please go ahead.
Speaker Change: The control arm so yeah.
Speaker Change: Further controlled rights acquisition, that's what they had in terms of AUM under lease.
Noah Hung: Good morning, Nick and team I guess the first question here is also on the Utica. If you guys could give any latest thoughts on spacing just for for new drill locations.
Speaker Change: Gotcha. So they didn't have a right up to the whole 36, Okay got it.
Speaker Change: 36000, sorry.
Speaker Change:
Speaker Change: And of those eight wells that are.
Noah Hung: Yes, I can do that just now.
Speaker Change: We're gonna be turned in line on that.
Noah Hung: So on the spacing so far with the BB six wells like we have they are at a 300 foot spacing.
Speaker Change: That acreage and are all those marcellus or any of those beautiful.
Speaker Change: Those are all Marcellus.
Noah Hung: And that's in line and then we have a few more spacing tests coming up after 200 feet.
Speaker Change: Okay, and just one more on the Utica, just as you're still thinking kind of three bcf per thousand foot of lateral and any update on what you're seeing with cost per lateral foot and those wells.
Noah Hung: So we will be able to like talk about that later.
Noah Hung: This year.
Noah Hung: I appreciate it and then my second question is just on cash taxes for 25.
Speaker Change: Yeah, Mike that's correct.
Speaker Change: The range that we gave guidance last quarter like the BBC and and all that they are holding production like we expect it to and they are they are in line for C. D. C is a positive.
Noah Hung: How we can think about that given how volatile strip has been.
Noah Hung: Yes. So we're still are de Minimis cash taxpayer until we reach kind of a cumulative 3 billion of free cash flow. So we don't see.
Speaker Change: And.
Noah Hung: Material kind of past tax payments until they get out to like 26 early 'twenty seven.
Speaker Change: Anything on the cost.
Speaker Change: Cost side, even further.
Speaker Change: Great. Thanks.
Speaker Change: I would just say part of the capital efficiency number that youre seeing in the total capex.
Jacob Roberts: The next question is from Jacob Roberts with T. P. H. Please go ahead.
Speaker Change: Deliver them as well.
Speaker Change: That's the target numbers were considered I think there's a little bit of room to improve and we're going continue to work on that but we're.
Speaker Change: Good morning.
Speaker Change: Good morning.
Speaker Change: I wanted to touch on the comment about coal mine methane volumes relative to the referenced anticipated mining plans.
Speaker Change: Very pleased with where we're at on the drilling and the capital efficiency side on those wells.
Speaker Change: Great I appreciate it guys.
Speaker Change: Any insight into how much inside.
Speaker Change: The next question is from Noah hung this with Bank of America. Please go ahead.
Speaker Change: In fact, you guys might have into those plans in the timeframe of that mine development, we should be thinking about and is that comment on developments specific to the Buchanan complex. It just it seems like you guys, maybe capturing almost all of the drainage gas there.
Noah Hung: Good morning, Nick and team I guess the first question here is also on the Utica. If you guys could give any latest thoughts on spacing just for new drill locations.
Speaker Change: But it appears there may be other minds with smaller volumes that could present, some opportunities and are there any limitations on capturing those volumes.
Noah Hung: Yes, I can do that just now.
Speaker Change: So on the spacing so far with the BB six wells like they are at a 300 foot spacing.
Speaker Change: Yes, our volumes are primarily Mccann in mind at this point in time I mean, do you have some capture operations in our northern Appalachian footprint as well.
Speaker Change: And that's in line and then we have a few more spacing tests coming up after 200 feet.
Speaker Change: We worked closely with the mine operators to have an understanding of what their annual or long term plans are.
Speaker Change: So we will be able to like talk about that later on.
Speaker Change: For this year.
Speaker Change: Can you provide to try to provide guidance.
Guidance and our expectations based on the best information we have from them.
Speaker Change: I appreciate it and then my second question is just on cash taxes for 25.
Speaker Change: Okay. Thank you and then my second one is on marketing just curious what is driving the changes year over year on the percentages in the various sales points. Maybe what you guys are looking for we're seeing in those markets at the moment and how that could shift through the year.
Speaker Change: How we can think about that given how volatile strip has been.
Speaker Change: Yeah. So we're still a de minimus cash taxpayer until we reach kind of a cumulative 3 billion of free cash flow. So we don't see.
Speaker Change: Material kind of cash tax payments until you get out to like 26 early 'twenty seven.
Speaker Change: Marketing is on a daily basis, we're continually optimizing with our ft portfolio, which end markets. We had so there's.
Speaker Change: Okay. Thanks.
Speaker Change: Any variation youre seeing quarter to quarter or year to year.
Jacob Roberts: The next question is from Jacob Roberts with T. P. H. Please go ahead.
Speaker Change: It's just optimization on the marketing side, we haven't entered into.
Jacob Roberts: Good morning.
Speaker Change: And too many new sort of ft contracts or anything like that that would fundamentally change the market split.
Jacob Roberts: Alright.
Speaker Change: I wanted to touch on the comment about coal mine methane volumes relative to the referenced anticipated mining plans did you give any insight into how much inside.
Speaker Change: Thank you I appreciate the time.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Tyler Lewis for any closing remarks.
Speaker Change: In fact, you guys might have into those plans in the timeframe of that mine development, we should be thinking about and is that comment on developments specific to the Buchanan complex. It just it seems like you guys, maybe capturing almost all of the drainage gas there.
Speaker Change: Thank you again for joining us. This morning, please feel free to reach out if anyone has any additional questions. Otherwise we will look forward to speaking with everyone again next quarter. Thank you.
Speaker Change: But it appears there may be other minds with smaller volumes that could present, some opportunities and are there any limitations on capturing those volumes.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Yeah, our volumes are primarily Mccann in mind at this point in time I mean, do you have some capture operations in our northern Appalachian footprint as well.
Speaker Change: We work closely with the mine operators, who have an understanding of what their annual or long term plans are.
Speaker Change: And we've tried to provide.
Speaker Change: Guidance and our expectations based on.
Speaker Change: The best information, we have from them.
Speaker Change: Okay. Thank you and then my second one is on marketing just curious what is driving the changes year over year. The percentages in the various sales points, maybe what you guys are looking for staying in those markets at the moment and how that could shift through the year.
Yeah, you know marketing is on a daily basis, we're continually optimizing with our ft portfolio, which end markets. We have so there's.
Speaker Change: Any variation, you're seeing quarter to quarter or year to year.
Speaker Change: Optimization on the marketing side, we haven't entered into.
Speaker Change: And too many new sort of ft contracts or anything like that that would fundamentally change the market split.
Speaker Change: Thank you I appreciate the time.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Tyler Lewis for any closing remarks.
Thank you again for joining us. This morning, please feel free to reach out if anyone has any additional questions. Otherwise we look forward to speaking with everyone again next quarter. Thank you.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].